Can India benefit if factories from China were relocated?

May 07, 2020 12:11

Illustration: Uttam Ghosh/Rediff.com

The Economic Research Department report from the State Bank of India, 'How can COVID benefit India with trade and factory diversion from China', authored by Dr Soumya Kanti Ghosh, group chief economic adviser of the bank, makes interesting observations.

'Although, the Revealed Comparative Advantage for India is lower than China as far as Capital Goods Exports are concerned, India can still capitalise on this opportunity to push its Capital Goods exports,' it says.

'However, the bigger opportunity right now is in consumer goods sector, in which India has an RCA greater than China.

'For consumer goods sector, looking at the MSME profile of the country, the biggest concentration is in the textile and clothing sector(17.30%), food products (12.30%) and crop and animal production (10.0%).

'Although we do have comparative advantage in textiles and animal goods, in food products we are not competitive. The government can give a direct push to this sector, so that MSME firms involved in food product manufacture get benefitted.

'Although 2020 is a lost year in terms of trade, India can think long-term and build relations so that it can occupy the space vacated by China,' the report concludes. 'With just 1.7% in world's merchandise exports, India has a long road ahead to catch up with China. But it must be now, now and now!'

You can read the full report here.

« Back to LIVE

TOP STORIES

EPL PIX: Manchester City thump Wolves; Arsenal down Bouremouth

IMAGES from Premier League matches played on Saturday.

Real Madrid secure LaLiga title after Girona thrash Barca

Ancelotti's second-string players proved they were up to the task as they secured three points for Real and kept them on course for the inevitable LaLiga title celebrations.

Kotak Mahindra Bank reports 25% rise in Q4 net profit

Kotak Mahindra Bank on Saturday reported a 25 per cent growth in its March quarter net profit at Rs 5,302 crore, limited by a drop in the core income due to narrow interest margins. On a standalone basis, the city-headquartered lender's...

1 IAF personnel killed, 4 injured in Poonch terror attack

The attack took place near Shashidhar in the evening when the vehicles were moving towards Sanai Top in the district's Surankote area.

IPL PIX: RCB fumble before scripting win over GT

IMAGES from the Indian Premier League match played between Royal Challengers Bengaluru and Gujarat Titans in Bengaluru, on Saturday.